22nd Nov 2024 15:56
(Alliance News) - Unilever PLC on Friday increased its target for return on capital as it said it was on course to meet strategic and cost savings targets by the end of 2025.
At an Investor Event, the London-based consumer goods company which owns brands such as Marmite and Domestos confirmed it remains on track to deliver its EUR800 million productivity programme and the separation of its Ice Cream business by the end of 2025.
The group will then focus on four business areas as previously announced. These are: Beauty & Wellbeing, Personal Care, Home Care and Foods (formerly Nutrition).
These four business groups will be driven by 30 'Power Brands' and operate across 24 business group-led markets. These 24 markets represent nearly 85% of Unilever's turnover. The remaining 100 plus smaller markets will be run on a 'One Unilever' basis to benefit from scale and simplicity.
Unilever's medium-term guidance remains unchanged. Post the separation of Ice Cream, it aims to deliver mid-single digit underlying sales growth, supported by underlying volume growth of at least 2%.
The company expects modest underlying operating margin improvement, driven by gross margin expansion through operating leverage and productivity improvements.
The firm has an ambition to deliver top third total shareholder return across its peer group and achieve an underlying return on invested capital in the high teens, ahead of a previous ambition of mid-teens. It aims to sustain an average cash conversion ratio of around 100% over time.
Value creation will be underpinned by disciplined capital allocation. This will include making investments to drive growth and productivity, continuing to reshape the portfolio through pruning and bolt-on acquisitions, and delivering attractive capital returns to shareholders.
Chief Executive Hein Schumacher said: "Our goal is to deliver best-in-class performance with market-making, unmissably superior brands. We believe that our Growth Action Plan 2030 will help us to deliver on this ambition."
Shares in Unilever rose 2.9% to 4,675.00 pence each in London on Friday.
By Jeremy Cutler, Alliance News reporter
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